A new week in tax practice begins, fittingly, with a ruling that returns to first principles. Before speed, before automation, before any of the reforms reshaping FBR's architecture, the law has always demanded one thing above all else: that like cases be treated alike, and that no taxpayer be condemned unheard.
A Lahore based taxpayer had filed an income tax refund claim for tax year 2024, supported by the same category of documents, including a sworn affidavit, that had secured approval of an identical refund claim the preceding year. This time, the claim was rejected on the stated ground that the affidavit had not been submitted, despite the document already sitting on the department's own record. The taxpayer was never given a hearing before the adverse decision was made.
The Federal Tax Ombudsman's response to this was precise and unsparing. First, on consistency, the Ombudsman observed that the same tax office had accepted materially identical documentation only one year earlier, making the subsequent rejection inherently arbitrary rather than a genuine reassessment on the merits. Second, on process, the failure to grant any opportunity of hearing before an adverse order was held to violate the basic principles of natural justice that govern every administrative determination, regardless of how routine the underlying claim may appear. Third, and perhaps most instructive for practitioners, the department's argument that the matter belonged exclusively before the appellate forum was rejected outright. The Ombudsman held that maladministration in the handling of a refund claim falls squarely within its own jurisdiction, entirely independent of whatever appellate remedy may also exist on the substantive question.
There is a further point worth elevating. The Ombudsman noted that the department had a straightforward means of verifying disputed facts, in this instance checking the taxpayer's electricity consumption records through the relevant distribution company, rather than defaulting to outright rejection on a technical pretext. Choosing rejection over verification, when verification was readily available, was itself treated as evidence of maladministration.
What elevates this beyond a single taxpayer's grievance is the principle it reaffirms as this new week of practice begins. Administrative consistency is not a courtesy extended to compliant taxpayers, it is a legal obligation the department owes to every filer whose position mirrors one already accepted. A hearing before an adverse order is not a formality to be dispensed with for convenience, it is the taxpayer's right. And jurisdictional objections raised to avoid Ombudsman scrutiny will not succeed where the complaint is genuinely about how the department behaved, not merely about what it ultimately decided.
Muhammad Rehan Sarwar
Advocate High Court,
The Nomologists Law Firm
#FTO #TaxLaw #NaturalJustice